Literature Review Final Draft

Running Head: TRUST AND ATTITUDES ON CONSUMERS E-COMMERCE BEHAVIORS 1

TRUST AND ATTITUDES ON CONSUMERS E-COMMERCE BEHAVIORS 6

Impact of Trust and Attitude on Consumers Online Purchase Behaviors

Feihai Ma

Professor Rooney

August 6, 2019

Introduction

The advent and growth of communication and information technology in the past decades has significantly changed lives and provided new opportunities for consumers and businesses. Its integration into business has greatly impacted on consumer behaviors. With the increasing entry of internet into the society, customers are tending to purchase retail products from their online stores rather than the traditional purchase system. An increasing number of consumers have access to the internet, which provides them fast and easier access to services and products. Technology has led to the rapid growth of new markets, and consumers have given consumers a broad product or service choice base. Though e-commerce is increasingly expanding its base, it has an impact on consumers’ welfare in terms of price, trust, quality, choice, efficiency, and transparency. This paper will evaluate how trust and attitude impact on consumers online purchase behaviors.

Summary

Consumer behavior has been hypothesized as the research of individuals’, groups, or organization and the processes they engage in to select, secure, and dispose of products, or ideas or experiences to satisfy their wants and the effects these processes have to the customer or the society (Meskaran & Shanmugam, 2013). Every consumer has different purchase behavior different from the other. Choices on purchase patterns are influenced by social and psychological factors, which, in return, influence the purchase decision process. According to Moshref et al. (2012), before customers purchase a product or service over the internet, consumers predict various risks such as money loss, quality of the product, and product non-delivery. Besides, consumers considered psychological factors such as trust and security. Consumers have a feeling of fear of monetary loss, non-delivery of products, poor quality, breach of trust, and the misuse of personal information (Baubonien & Gulevičiūtė, 2015).

Web-based shopping behavior is an individual’s inclusive perception and evaluation of a product or service during the shopping process, which can result either in a good or bad way. Different scholars have conceptualized consumer online purchase behaviors in broad ways. The theory of planned behavior (TPB) asserts that consumers’ pivotal beliefs influence online purchase beliefs and the resulting behavioral outcome (Meskaran & Shanmugam, 2013). According to TPB, consumer’s beliefs are in three categories; behavioral beliefs which influence attitudes, control beliefs that influence perceived behavioral control, and normative beliefs that affect subjective norm (Meskaran & Shanmugam, 2013).

Attitude towards e-commerce transaction is defined as consumers’ collective potential to transact with a specific retailer over the internet. Consumers generalized attitude on online shopping influence purchase decision and the resulting outcome. Consumers attitude towards a utilitarian motivation in terms of convenience, cost-benefit, variety of choice, times effectiveness, and quality merchandise determine consumers online purchase behaviors (Moshref et al, 2012). Furthermore, attitude based on hedonic motivation by factors such as happiness, sensuality, fantasy, and enjoyment influence consumers web-based purchase behaviors. The levels of attitudes consumers have towards Web retailer transactions determine the willingness of consumers to transact online (Baubonien & Gulevičiūtė, 2015). If consumers have a positive attitude towards the online transaction, they will actively transact with Web retailers. On the other hand, if they have a negative attitude, they are unwilling to transact online.

Consumer’s willingness to engage in e-commerce transactions is hypothesized to be their behavioral intention to transact online with online retailers. Consumers readiness to transact online is determined by the level of trust and attitude regarding e-commerce processes (Fastoso et al, 2012). Trust has been a critical component for the continued growth of e-commerce. Davis and Schoorman in 1995 defined “trust” as a single party’s willingness to engage in vulnerable actions of another party with the expectations that the opposite party will accomplish a particularly important action to the trustor regardless of the capacity to track or control the other party (Abdul et al, 2015). Further, it has been defined as individuals understanding of a risky course of action on the confidence that all parties involved will act competently and dutifully. Internet is characterized by its open nature and global reach; therefore, concerns of trust become a critical element. Consumers are concerned about their privacy and security issues. Ariff et al. 2013, hypothesized that trust impact on consumers’ online shopping behaviors. There are potential risks that come with online shopping such as quality of the product, financial risks such as losing money or product non-delivery, and privacy. Researchers have hypothesized that online trust is lower than face-to-face relationships.

Discussion and Evaluation

Consumers online purchase behaviors are subject to the relationship between attitude and trust. Online shopping environment is impacted by trust and perception factors consumers have about Web retailers (Ariff et al, 2013). Before individuals’ engage in any online transaction, they undergo the purchase decision process whereby they evaluate potential risks and level of utility. Individuals purchase products or services based on the trust they have to online shops (Fastoso et al, 2012). There is a positive relationship between online purchase behaviors and trust and attitude. If consumers have doubts that there are high risks associated with the transaction they are about to engage in, they opt for a physical transaction. According to research, a negative attitude towards online shopping lead to negative impacts on consumers online purchase behaviors. Consumers are concerned about potential risks that arise from online transactions.

E-commerce environment is inherent of a broad array of risks as compared to the traditional commercial environment. Consumers are concerned with value for their money and security for the sensitive information they provide online. Uncertainty in security and trust negatively impact consumers online purchase behaviors (Ariff et al, 2013).

Conclusion

The incoming of technology has greatly influenced the business scope. In the current world, a large number of individuals have access to the internet and advanced technologies such as mobile phones and personal computers; therefore, they can engage in different social and economic transactions. It has provided business organizations with an opportunity to explore new markets. Besides, it has given consumers a wide array of benefits such as convenience, fast, and variety of choices, large geographical reach, and ease of use. Though it has positive impacts, it is associated with negative risks such as fears to loss of money, poor product quality, non-product delivery, and misuse of personal information. The levels of trust individuals have to Web retailers determine consumers online purchase behaviors. If consumers have a positive attitude and trust to a Web retailer, they become willing to purchase from online platforms. On the other hand, if consumers have a negative attitude and a feeling of breach of trust, they become unwilling to purchase from online shops.

References

Abdul Rehman, Chaudhary, Muhammad Illyas, and Muhammad Khyzer Bin Dost. (2015) "Online Shopping Trends and Its Effects on Consumer Buying Behavior: A Case Study Of Young Generation Of Pakistan." NG-Journal of Social Development, VOL. 5, No. 1.

Ariff, M.S.M., Yan, N.S., Zakuan, N., Bahari, A.Z., Jusoh, A. (2013). Web-based Factors Affecting Online Purchasing Behavior. IOP Conf. Series: Materials Science and Engineering. Vol. 46, pp. 1-10.

Baubonienė, Ž., & Gulevičiūtė, G. (2015). E-Commerce factors influencing consumers ‘online shopping decision.

Fastoso, F., Whitelock, J., Bianchi, C., & Andrews, L. (2012). Risk, trust, and consumer online purchasing behaviour: a Chilean perspective. International Marketing Review.

Meskaran, F., Ismail, Z., & Shanmugam, B. (2013). Online purchase intention: Effects of trust and security perception. Australian journal of basic and applied sciences7(6), 307-315.

Moshref Javadi, M. H., Dolatabadi, H. R., Nourbakhsh, M., Poursaeedi, A., & Asadollahi, A. R. (2012). An Analysis of Factors Affecting on Online Shopping Behavior of Consumers. International Journal of Marketing Studies. Vol. 4(5), pp. 81-98.